MoffettNathanson Slams 2 Social Media Stocks

MoffettNathanson cut its price targets on SNAP and TWTR stock

Jul 20, 2017 at 11:42 AM
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Analysts are weighing in on chip stock QUALCOMM, Inc. (NASDAQ:QCOM), Snapchat parent Snap Inc (NYSE:SNAP), as well as social media company Twitter Inc (NYSE:TWTR). Here's a quick roundup of today's bearish brokerage notes on shares of QCOM, SNAP, and TWTR.

QCOM Stock Slumps on Weak Guidance

QUALCOMM released better-than-expected earnings last night, but traders and analysts are focusing on the impact of the company's ongoing legal battle with Apple -- which forced QCOM to issue lackluster current-quarter profit guidance. Instinet cut its price target to $58 from $60, and Deutsche Bank cut its price target to $60 from $62. On the flip side, BMO raised its price target by $1 to $55 this morning.

Last seen at $54.13 and down almost 5%, QCOM stock has fallen nearly 17% year-to-date. Options traders appeared upbeat on the underperforming stock ahead of earnings; QCOM's Schaeffer's put/call open interest ratio (SOIR) of 0.73 ranks higher than only 15% of all others from the past year, as short-term speculators have rarely been more call-focused.

SNAP Continues to Back Down from IPO Price

MoffettNathanson cut its price target on SNAP stock to $9 from $11. Snap has been trending lower since shortly after its March 2 public trading debut, and the stock's losses have accelerated since it broke below its IPO price of $17 earlier this month -- exacerbated by a few recent downgrades from underwriters.

SNAP is down 0.8% to trade at $14.85, and a continued onslaught of shorting activity could keep the stock under pressure. Short interest ramped up by 9.6% in the last two reporting periods, and now accounts for 10.5% of the stock's float.  

Analyst Looks for Twitter Stock to Collapse

MoffettNathanson also cut its price target on TWTR stock to $10 from $11, as the brokerage firm expects the stock's value to be cut roughly in half. TWTR is trading up 2.7% at $20.67 -- its highest point since last October.

Options traders are much more optimistic on Twitter, as the stock sports a 50-day call/put volume ratio of 5.31 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio indicates that traders have bought to more than five TWTR calls for every put during the past 10 weeks. Additionally, this ratio stands higher than 97% of all other readings in the past 52 weeks, hinting at a much healthier-than-usual appetite for bullish bets over bearish of late.

Looking ahead, Twitter is set to report second-quarter earnings a week from today, on the morning of Thursday, July 27.

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